Labrador Liquor Wholesale Pty Ltd & Ors v CEO Customs

[2007] HCATrans 102

[2007] HCATrans 102

IN THE HIGH COURT OF AUSTRALIA

Office of the Registry
  Brisbane  Nos B4 of 2007 and B5 of 2007

B e t w e e n -

LABRADOR LIQUOR WHOLESALE PTY LTD

First Applicant

LAWRENCE ERIC WRIGHT

Second Applicant

JEFFREY ANDREW JOHN BRYCE

Third Applicant

and

CHIEF EXECUTIVE OFFICER OF CUSTOMS

Respondent

Applications for special leave to appeal

KIRBY J
HAYNE J
CRENNAN J

TRANSCRIPT OF PROCEEDINGS

AT CANBERRA ON FRIDAY, 2 MARCH 2007, AT 10.23 AM

Copyright in the High Court of Australia

__________________

MR R.J. BURBIDGE, QC:   May it please the Court, I appear with my learned friend, MR P.J. WOODS, for the applicants.  (instructed by O’Keefe & Mahoney Bennett)

MR R.W. GOTTERSON, QC:   May it please the Court, I appear with my learned friend, MR F.W. REDMOND, for the respondent.  (instructed by Australian Government Solicitor)

KIRBY J:   Mr Burbidge, we have deep thought about how we would deal with the fact that you have two matters but essentially they involve the same parties and we are not inclined to give you two full time limits, but to give you a little bit of leeway in the one grant of time.

MR BURBIDGE:   That is most kind, your Honours.  I had anticipated that that may be the ultimate thinking.  Thank you, your Honour.

KIRBY J:   You are always a step ahead of judges.

MR BURBIDGE: I would not say that, your Honour. Your Honour is too kind. This, as your Honours would know, is a case which raises, in our submission, three matters. They are, one, a matter of invalidity; two, a matter of construction or, more accurately, the question of whether section 15A of the Crimes Act does indeed pick up the Penalties and Sentences Act 1992 (Qld) and the third question is one of injustice, whether or not there has been an injustice to the applicants such that this Court ought grant leave.

Your Honours, I propose to address each of those very briefly, but before I do so I propose to take your Honours, perhaps unusually, to a brief chronology of events so that the framework against which the problems which we assert to exist may be seen.

KIRBY J:   We got the correct reasons for judgment of Justice Fryberg yesterday, I think.  Does much turn on the difference between the changes in the two drafts or not?

MR BURBIDGE:   No, your Honours.

KIRBY J:   They seem to be purely verbal changes.

MR BURBIDGE:   Yes, they do. 

KIRBY J:   Does anything turn on the different reasons for judgment for your arguments or not?

MR BURBIDGE:   No, there are no differences in the reasoning.  The sole changes between the two judgments on conviction relate to the number of charges of which his Honour found the applicants guilty.  In the first instance he found them to be guilty of 24 charges each and then in sentencing his Honour had come to the view that there were 45 charges and sentenced them accordingly.  Then later in the same month, on 28 March 2006, his Honour amended his judgment convicting each of the applicants on 45 charges.

The sole point in that circumstance, from our perspective, is the proposition that the manner in which the process was conducted was such as to lead to significant confusion.  Could I just finish that line of country by saying this.  The matter, of course, went to appeal.  If your Honours have the application book, their Honours found at page 143, as the order of the court there records, that in turn necessitated an application to the court under the slip rule because the court had upheld the appeal insofar as it related to a series of matters that were statute barred.

Then, if your Honours would turn the page to 144.  At the hearing of the slip rule their Honours did not hear an application as such, but had taken on board that there was some error and handed down the amended order that your Honours there see.  It was not recognised by those appearing at the slip rule application, but that amended order itself is deficient in several respects. 

Perhaps whilst your Honours are looking at it I can indicate what they are.  The order 2 is in error in that it refers in the third line to “seven shipments” where, in fact, there are eight.  That does not much matter of course.  Then the next two references to 120(1)(vi) of the Excise Act are themselves mistaken.  They should be 120(1)(iv) of the Excise Act which, of course, were the evasion charges.  A further attempt has been made to have the court convene for the purpose of addressing those matters.  That itself has not been successful.

KIRBY J:   We would not normally grant special leave simply to make corrections of those because they are not, as it were, determinative of what happens.  They are preambular.

MR BURBIDGE:   I do not think there is the slightest doubt that it would be corrected under the slip rule in due course, your Honour.

KIRBY J:   Yes.

MR BURBIDGE:   Such as it is, the point which is a relatively insignificant point is that confusion was generated – and I will come back to that when we look at the statement of claim which I sadly have to hand up to your Honours, if I may, in due course, but if I could briefly just indicate the mechanics of the process.  It commences with the recognition that there were eight shipments between 1995 – I think about mid‑year – and 1996 which were the subject of the various matters in the proceedings.

The action by the authorities was taken in 1997 and for reasons unconnected with the applicants it came to trial in 2005, judgment being delivered in the first instance on 6 February 2006.  Your Honours, if I may in passing draw to your Honours’ attention the opening, that is that which my learned friend opened to his Honour the trial judge.  Do your Honours have a black volume containing material from the applicants?  It should be in a ‑ ‑ ‑

KIRBY J:   We have it in perhaps a different compilation.

MR BURBIDGE:   Thank you, your Honour.

KIRBY J:   What tab is it?

MR BURBIDGE:   It is the closing pages of the document.  If your Honours would look at what is page ‑ ‑ ‑

KIRBY J:   Yes, that has the Penalties and Sentences Act.

MR BURBIDGE:   It is page 122, your Honour.

KIRBY J:   Yes, we have that.

MR BURBIDGE:   Your Honours there should find a few pages from the transcript.

KIRBY J:   Yes.

MR BURBIDGE:   If your Honours would go past the first page which is transcript page 48, page 122 of the material, the opening commenced, as your Honours would see at page 122.  I do not need to take you to anything there.  If your Honours would go to the following page, 123, at line 20 your Honours would see that my learned friend Mr Gotterson in opening said this:

But to revert to section 234(1)(a), it is the evasion provision, “a person shall not evade payment . . . a person shall not move –

speaking of section 33 of the Customs Act.  His Honour at line 40 said this:

But, you see, it wasn’t immediately clear to me what your case was going to be . . . The offence of evading I clearly understood.  But your case, as I understand it, is they did not export the goods they say they exported . . . 

Which means that presumably, since you say they had the goods, that by not exporting them, the goods stayed in their store.  Then you do somewhere plead that they moved . . . But you don’t really give any detail of that.

MR GOTTERSON:   That’s something that we - that is a circumstance that we would be asking the Court to draw the inference of.

Could I just pause to say that the point of my taking you somewhat unusually to this material is to support two propositions:  first, that there was significant reliance on the averments, as will be seen, and, second, that an hypothesis consistent with innocence was never negatived.  Those are the two points.

KIRBY J:   This is at the very opening of the proceedings?

MR BURBIDGE:   Correct.

KIRBY J:   But the proceedings then unfolded and you got some very strong findings of fact against you which ‑ ‑ ‑

MR BURBIDGE:   Yes, but they did not include, with respect, the absolute foundational fact, namely, that the goods had been delivered into home consumption.  The matter was fought out on the issue of whether or not the goods had been exported, as the applicants claimed, and that issue was one on which they were comprehensively defeated and no possible complaint can be made in that area, but what was never addressed was the question of what followed, ie, did they deliver it into home consumption or were they, to quote an hypothesis, merely in the stage of preparation to attempt to defraud the Commonwealth and so on.  That matter, we say, was never addressed.

HAYNE J:   At 117 of the application book, line 27, or thereabouts, you have a record of a passage from the reasons of the trial judge which says, in effect:

As Labrador’s stock book shows, they ceased to be part of the stock held under bond.

They were not exported, “I infer” that.

MR BURBIDGE:   Yes.  It is of course true that what his Honour did in each case, repeating it in each case, was he identified those three facts, stated that the averments were correct and in one case went considerably further and analysed averments and so on to ascertain whether they were in truth averments, but our point, I suppose, is this, that the case presented was that the records were fabricated.  It was not suggested that they in truth showed that the material had been taken out of the warehouse.  What the books showed was that they had been exported and there was a reasonably narrow but clear distinction involved that the pleadings said, “Were they taken out of bond for the purpose of export?” and the answer, “Yes, that’s what we pleaded” and it was averred that they had been delivered into home consumption, which was denied.

HAYNE J:   Your clients were on the horns of a dilemma, were they not?  Their case was the goods had gone from the bond.  They had gone from the bond to export.  They were disbelieved on the proposition that they had gone to export.  Where does that leave your client other than with an available inference there being no suggestion of loss of the goods, theft, accident, they have turned them to profitable account otherwise?

CRENNAN J:   And the two sets of invoices.

MR BURBIDGE:   I can only say the case was conducted on the basis that these were false, which had been generated by the applicants in order to support the proposition that they had been exported.  Let it be supposed that we had to go further, we would say, well, there is an available inference in relation to that too, namely, that they generated the invoices to support the false scheme.  That too is an available inference.  So that we would submit that it does not really much matter when one comes to that point in any event. 

KIRBY J:   I am getting a bit lost because you opened with the question, which is the way you presented your case, concerning the surrogate State law and the averments come a little bit later, do they not?  What is the argument on the surrogate State law?

MR BURBIDGE:   It relates to penalty, your Honour.

KIRBY J:   What is the problem?

MR BURBIDGE: The problem is this. What his Honour the trial judge did is he determined that section 15A picked up the Queensland Act.

KIRBY J:   What is the problem with its picking up that Act?

MR BURBIDGE:   The problem is, first, that the Act itself is one which is a legislative scheme directed towards the gathering together of criminal law and is directed to rehabilitation of offenders and the like.  What his Honour did was he said, “Well, the amount involved is X dollars”.  He then purported to translate that, without any basis we would say, into penalty units by utilising section 5 of the Penalties and Sentences Act, nonetheless, for what it is worth, that there is, in fact, a conversion methodology in the Crimes Act.  It is section 4AB, which is different, and it is no mere matter of mathematics because section 4AB applies to allow a transfer from a penalty, a monetary penalty imposed within the Act, into penalty units.  There is such a formula in the Crimes Act.

KIRBY J:   Is it your contention that the federal Act has its own specific and particular and different scheme which, by conversion, is to the advantage of your clients and that it bumps out any State scheme which is inconsistent?

MR BURBIDGE:   It would, except that we say that in truth the 4AB does not itself touch on the ‑ ‑ ‑

KIRBY J:   You say that in terms, but does the federal Act govern the quantification of the default imprisonment?

MR BURBIDGE:   No.

KIRBY J:   What is the inconsistency then?  Why cannot the State law be picked up as a surrogate law?

MR BURBIDGE:   As I say, your Honour, there are two problems.  The first is it is not picked up because the totality of the Penalties and Sentences Act is directed, as its provisions make plain, and I regret your Honours do not have the totality of it, but it makes plain that what it is directed to is not the imprisonment of persons who have suffered pecuniary penalty through the civil process.  It is wholly and solely, we would submit, directed to criminal law.  It opens with the proposition, “whereas the criminal law and the power of courts to impose sentences represent important ways” et cetera, “purposes of the Act include collecting into a single Act general powers of courts to sentence offenders” ‑ ‑ ‑

KIRBY J:   But there is Division 3 which deals with sentences of imprisonment.  Which is the section which Justice Fryberg used as a surrogate federal law?

MR BURBIDGE: He purported to utilise 182A, which is in Part 11 and, if I might be so bold, if your Honours would look, as you go past, at 182, for example, which has no application here because it was not conducted on indictment, but your Honours would see that there is a regimen in place for how that matter is to be dealt with, “an offender” might be “brought before a justice”, et cetera, and “the justice may commit the offender to prison” and that, of course, is not a justice of this Court, of course. Section 182A:

A court that orders an offender to pay a penalty may also order that, if the offender fails to pay –

et cetera.  His Honour then, as I say, purported to apply section 5 penalty unit and what his Honour did was he took a particular sum and divided it by $75, the provision contained in this Act, and imposed penalties in that way and then, in effect, tailored the calculation so that the ultimate penalty was five years in gaol, a matter ‑ ‑ ‑

KIRBY J:   You say there is no federal law that provides that so much money is equivalent to so many days in prison?

MR BURBIDGE:   Correct, I do.

KIRBY J:   Therefore, what is the way you say a judge exercising federal jurisdiction on conviction for these offences would properly order default?  Just on general principles, would the judge do it?

MR BURBIDGE:  Yes, enforced by bankruptcy as being the traditional manner in which the provisions have been enforced if appropriate.

HAYNE J: Is that a proposition that section 15A of the Crimes Act was not engaged?

MR BURBIDGE:  Correct.  Yes, it was.

HAYNE J:   Well, that proposition was put to the Full Court.  It was dealt with.  Where is the Full Court in error, having regard in particular to the definition of “fine” contained in the Crimes Act as including penalty?

MR BURBIDGE:   I can only say, your Honour, this, that the Act as a whole – perhaps I can make brief reference to the sections on which we rely – is simply in its reading not one which is picked up in respect of civil process resulting in the imposition of a pecuniary penalty.  Insofar as one would look at Part 2, Governing principles, all of which relate to punishing offenders and so on, the totality of this Act is directed, we submit, to punishing criminal offenders and to their rehabilitation.  It is simply one which is not engaged by the civil process, nor did his Honour in fact comply or purport to comply with its terms.

Section 10 “Court’s reasons to be stated and recorded” - if a fine is imposed then the person upon whom it is imposed is to be told certain matters about the availability of fine option orders.  That is to be found in Part 4, Division 2.  The Act is a scheme and it is intended to provide rehabilitation and to keep people out of gaol and it is directed, we submit, plainly to those who are convicted in the criminal courts of criminal offences.  Your Honours, could I just ‑ ‑ ‑

HAYNE J:   That is as may be.  Do I misremember – am I wrong in thinking that the Crimes Act (Cth) defined “fine” to include penalty?

MR BURBIDGE:   No, you do not misremember it.  It includes – “fine” is defined to include a pecuniary penalty, yes.  Your Honour is quite right.  As does the ‑ ‑ ‑

HAYNE J:   So as a matter of federal law, when 15A speaks of fines it includes within the ambit of fines, pecuniary penalties?

MR BURBIDGE: Yes, it does. Your Honour, the second half of our concern here is that the appeal court found, so far as the application of Part 1B of the Crimes Act which purports to deal with imprisonment, his Honour the Chief Justice found that it did not apply.  Mr Justice Jerrard found that it did apply and said that he would have imposed as one of the conditions within that section require, a non-parole period, and the third member said that it was arguable –Mr Justice Williams – that it applied but if it did then the time for its application had not arrived.  Nonetheless though, they had been in effect – they had sought time and been refused and had been sentenced to spend this time in imprisonment.

Your Honours, there are several points that I do wish to make very briefly if I may, and I see that I am already on borrowed time, as it were.  Could I make these ‑ ‑ ‑

KIRBY J:   All of the matters that you have argued so far appear to be relevant to the appeal against sentence.

MR BURBIDGE:   Not entirely, your Honours.  Could I just deal with the other two matters.

KIRBY J:   I am not saying that that was not a wise apportionment of your time.

MR BURBIDGE:  No.  Well, I had not intended to spend that time on it, but could I just say this, your Honours, that the core of the matter appears in relation to our situation, in his Honour the trial judge’s judgment at the application book at page 78.  Can I take your Honours to that?

KIRBY J:   Yes.

MR BURBIDGE:  What his Honour there said, commencing at paragraph [251]:

On the other hand –

this, we submit, shows the way in which his Honour dealt with the averments and – well, I will simply read it:

On the other hand, accepting that the charges against Labrador are proved, there is no evidence tending to exclude Mr Bryce’s involvement.  Although it was pleaded . . . that occurred without his knowledge or consent, Mr Bryce did not suggest any hypothesis upon which he might not have been knowingly concerned in Labrador’s conduct.  That poses a difficulty for his case.  The plaintiff pleaded in relation to each shipment that Mr Bryce knew -

Now, of course, it is not open to plead matters of intent on any view of the averment provisions.  Since day one, or since 1916, at least, they have…..pleading of matters of intent.  So that is the first matter to which his Honour draws attention.  The second matter follows:

He also pleaded in relation to each shipment that Mr Bryce aided and abetted, counselled or procured –

et cetera, in relation to each of the matters.  As indeed they did.  They pleaded the totality of the accessory section in both the Customs Act and the Excise Act. They are section 236 of the Customs Act, but that is a deeming section.  So what we have is a situation where the averment pleads every aspect necessary to carry the matter into the deeming section and then they are thereby, by that section, deemed to be guilty.  So that it is a combination of averment of – and each of those two matters identified by his Honour the trial judge is a matter which it is not open to take into account.  In any event, he went on:

I see no difficulty in characterising the plaintiff’s allegations in the statement of claim as averments.

His Honour had said a line before:

If that is correct they provide prima facie evidence –

He then went on to consider whether they were in truth averments and said at line 33 of that page:

The only unresolved question is whether they are averments for the purposes of the averment provisions. 

Then on the following page, 79, at the final line, 19:

In my judgment averments in the statement of claim are averments for the purposes of the averment provisions.

[254]  It remains to determine Mr Bryce’s guilt or innocence.  That must be decided on the basis of all of the evidence, taking the averment provisions into account.  On that basis I am satisfied of his guilt –

et cetera.  So that, your Honours, what ultimately the trial judge has done is he has analysed averments to see whether they are in truth averments, and hence we would say embarked upon an exercise which would be totally unnecessary were he not relying on them.

KIRBY J:   Yes, all right.  Well, I think we understand the way you put it.  Is there anything else?

MR BURBIDGE:   Could I have a moment, your Honour, just to ensure that there is nothing that I really need to put?  I will just say briefly on the injustice matter, your Honours, we would submit this, that the circumstantial evidence requirement to which your Honour Justice Hayne made reference in Labrador Liquor itself - Labrador (No 1), I suppose – has simply not been met.

The hypothesis in question has always been present.  To the fact that it was enunciated at the outset is indicative of its reasonableness, so we would submit.  The case was not conducted on the basis that any credence

was to be given to the applicant’s false records and that both at trial and before the Court of Appeal the matter was conducted on the basis that those matters were false and hence of no value in probative terms.

Finally, your Honours, could I just indicate this?  I had prepared a brief outline of the oral argument which I would like to hand up.  Nonetheless, I do not now have the time to address it and I do so, if I may.

KIRBY J:   Does that contain anything of substance that you have not covered?

MR BURBIDGE:   It contains those submissions that we make on suitability on the invalidity matter, your Honour, yes, which I have not touched upon.  Other than that I do not wish to address ‑ ‑ ‑

KIRBY J:   Have you given a copy to Mr Gotterson?

MR BURBIDGE:   I am about to do so, your Honour.  I think he has one by email but, in any event, I will hand him a copy as well.

KIRBY J:   All right.  Hand it up.

MR BURBIDGE:  Thank you.  Yes.  Those are our submission, may it please the Court.

KIRBY J:   Mr Gotterson, we do not need to hear you on the conviction applications but we do need to hear you on the sentence matters.

MR GOTTERSON:   If the Court pleases.

KIRBY J:   In the draft notice of appeal they seem to be – this is on page 181 of the application book:

The Court of Appeal erred in holding that it was open to imprison the Second and Third Appellants under section 182A of the Penalties and Sentences Act 1992 (Qld).

That is the surrogate law question, and:

The Court of Appeal erred in finding it open and appropriate to utilise state civil legislation for enforcement of civil penalties for the purposes of punishment -

presumably punishment for the federal offences here.

MR GOTTERSON:   I wonder, as I read it, your Honour, that last paragraph, whether in fact they meant to say “appropriate to utilise State criminal legislation”.  I assume that ‑ ‑ ‑

KIRBY J:   Well, it is the Penalties and Sentences Act.

MR GOTTERSON: Yes, no doubt it is that. If the Court pleases, a point of difference between ourselves and our friends is as to what it is that section 15A(1) picks up. That section in its terms – I will go to it.

KIRBY J:   Now, we are looking at section 15A(1) of the Crimes Act?

MR GOTTERSON:   Yes.  The applicable version of it one finds is at the ‑ ‑ ‑

KIRBY J:   I am looking at it behind the green tab, “Legislation,” in the applicant’s materials that have been handed to us.

MR GOTTERSON:   I just want to check that that is - the correct version, and applicable version, as the Court of Appeal found, in fact, appears at the application book in the judgment of Justice Jerrard at pages 133 through to 134.  There was some debate about ‑ ‑ ‑

KIRBY J:   What page again, please?

MR GOTTERSON:   Page 133.

KIRBY J:   Yes.

MR GOTTERSON:   Continuing to page 134, if your Honour pleases.  It begins by saying:

A law of a State or Territory relating to the enforcement or recovery of a fine imposed on an offender applies to a person convicted in the State or Territory of an offence against a law of the Commonwealth. 

There is the proviso that follows at the top of 134:

The law applies:

(a)so far as it is not inconsistent with a law of the Commonwealth; and

(b)with the modifications made by or under this section.”

Now, a point of difference, and the principal point of difference, appears to be this. We contend that the law relating to the recovery of a fine or the enforcement of it that is picked up by 15A(1) is section 182A. The applicant’s argument is that no, that is not so. What 15A(1) picks up is the entirety of the Penalties and Sentences Act and then they attempt to demonstrate differences between it and the Crimes Act to say therefore no part of the Penalties and Sentences Act, including 182A, is picked up.

The submission that we make is that one goes only to the State or Territory law relating to the enforcement or recovery of a fine imposed on an offender and in this case that is section 182A. It is not the whole of the Penalties and Sentences Act, and indeed ‑ ‑ ‑

KIRBY J:   It is correct that there is no specific federal law either in the Crimes Act or anywhere else that sets out a tabulation of the equivalence between an amount found to be outstanding to the Commonwealth and the amount of imprisonment that must be served in default.

MR GOTTERSON:   Yes, there was certainly no competing Commonwealth ‑ ‑ ‑

KIRBY J:   There was no such general provision.

MR GOTTERSON:   Yes, indeed.

KIRBY J:   So we therefore can disregard the question of inconsistency of any federal law which is referred to in the legislation and we are just looking to whether or not this law, 182A of the Penalties and Sentences Act can provide the equivalent.

MR GOTTERSON:   In our submission it undeniably answers the prescript of being a law of a State with relation to the recovery or enforcement of a final penalty.  The statutory terms are all met.

KIRBY J:   There is that word “also” in the opening line of subsection (1) which links it into other provisions of the Queensland Act.  Does that create any difficulty in your submission or is it simply saying that in addition to everything else there is this separate provision providing for the matters dealt with in 182A?

MR GOTTERSON:   Yes.  In our submission it is the latter that deals with that.

KIRBY J:   How is it dealt with in the States where there is no provision such as 182A?

MR GOTTERSON:   Whatever might be in other States, their laws dealing with enforcement of fines or penalties ‑ ‑ ‑

KIRBY J:   It is a pretty unsatisfactory position for depriving people of their liberty that it is dependent on significant variations from State to State.

MR GOTTERSON:   If indeed there are variations but that certainly has not been a point that is put and may be at a policy level that is something that would be addressed but, in our submission, it cannot influence the operation or circumscribe the operation of 15A(1) by requiring it to be read as applicable ‑ ‑ ‑

KIRBY J:   But a primary instruction of the Queensland Act is a term which will satisfy the justice of the case and then there is no more than 14 days imprisonment for each penalty unit.

MR GOTTERSON:   Yes.  His Honour, of course, did not apply the maximum at all that is set out in ‑ ‑ ‑

KIRBY J:   Does not that requirement of satisfying the justice of the case suggest that where the Court of Appeal set aside some of the convictions that consideration of the justice of the case was then raised to be the first question before applying the mechanics of section 182A?

MR GOTTERSON:   That was a point that was mentioned before the Court of Appeal and did not succeed and what is ‑ ‑ ‑

KIRBY J:   Is not that what is required on the hypothesis that you are applying the surrogate federal law in the State statute you then have to take two steps.  You have to ask what does the justice of the case now require, having regard to the setting aside of the other convictions and the containment of the matters that are the subject of conviction, and does that alter the requirements of the justice of the case before we just apply the mechanics?

MR GOTTERSON:   That was agitated before the Court of Appeal and this is a case in which the monetary penalties were imposed only in respect of the evasion offences.  His Honour declined to impose any penalty in respect of what I might call the moving offences or the false statement offences.  Of the evasion convictions and penalties only one was disturbed.  That was for the second and third appellants in relation to the Honiara shipment.

There is no quarrel that of course that goes and the monetary penalty, so far as they are concerned in respect of that offence, goes, as does the default period in respect of that.  But the fact that the convictions in respect of the false statement for which no penalty was imposed that did not invite a revisit of the penalties imposed overall, in our submission, or indeed the default periods imposed.  It will operate that the total period of imprisonment will be diminished by the number of days that were imposed in respect of the one evasion offence against the second and third applicants.

In our submission, the fact that the penalty and the default days in respect of it have been removed does not require a revisiting of the monetary penalties imposed in respect of the other seven evasion offences or the days in default imposed in respect of them.

KIRBY J:   You have said that a couple of times now, but normally, in my experience, when you set aside a sentence you then go back and consider whether in new circumstance – you set aside a conviction and you go back and consider whether in the new circumstances of the convictions that survive and looking at them in their toto and given all the sentencing principles, including looking at the entirety of the sentence and so on, the sentence remains correct and the justice of the case would normally require you to do that.

MR GOTTERSON:   As to that, the Court of Appeal said, and I refer here at page 140 of the application book at paragraph [102] the ‑ ‑ ‑

KIRBY J:   Whose reasons are these?

MR GOTTERSON:   Of Justice Jerrard and all judges, insofar as this point is concerned, agreed.  The other two agreed with him.  His Honour said:

The appellants did not challenge the view that, if the ordered penalties were entirely unpaid – as appeared very likely – default periods totalling up to five years were appropriate, in view of their overall criminality.  They did not suggest that any other, lesser, default periods for the particular offences, or in total, ought to have been ordered.

There was no request that court revisit it.

KIRBY J:   What about the point on which the three judges of appeal were divided?

MR GOTTERSON: In that regard, your Honour, we rely on our submissions at paragraph 22 of our outline. They are at page 194 of the appeal book. In our submission, it is not a case for the application of section 119AB. That section itself applies where there has been a conviction for a federal offence in which imprisonment is the penalty and the point we make is that here there was no federal sentence of imprisonment imposed and that in any event, even if one did take the view that section 19AB was engaged, the appropriate time to consider that is later when there actually has been a default in payment of the monthly penalties and any entitlements under that in that section or any obligations on the court under that section might be engaged.

HAYNE J:   How is the court engaged at the point of default?  Let it be assumed there is default.  What does the court do?

MR GOTTERSON:   At that point, maybe, entertains argument as to whether it is a case under 19AB or not and makes orders but our submission is that it simply is not and the Chief Justice held that it was not.

HAYNE J:   A possible point of view, I think, which is a rather more radical point than any hitherto made, is that the 19AB issue does not arise because in fixing a term to be served on default you are fixing that which is to be served, period, and it then becomes, if there is any deficiency under 19AB a deficiency of recording in the records of the court, et cetera.

MR GOTTERSON:   Our primary submission is, if the Court pleases, that the section is engaged only where subsection (b) says:

a court imposes on the person a federal life sentence, or a federal sentence that exceeds, or federal sentences that, in the aggregate, exceed 3 years –

The terms are defined in section 16.  There is a definition of “sentence” which says “in sections 16B to 19AZD, means a sentence of imprisonment”.  In our submission, Justice Fryberg did not impose on anyone, obviously not a life sentence or a federal sentence, because he did not impose what answers to a sentence of imprisonment.  He, perhaps it engages with what your Honour Justice Hayne said, ordered a period of default, but not imposed a sentence of imprisonment.

HAYNE J:   There is this further difficulty I have in grappling with the point that there is nothing in the draft notice of appeal and there is nothing that I can read in the summary of argument on penalty that crystallises the point which we are debating and that presents a serious difficulty in understanding exactly what point we are meeting and dealing with.

MR GOTTERSON:   I do not think I can say anything more, your Honour.

KIRBY J: You are in front at that stage, but if Mr Burbidge sought to raise a specific ground of appeal contending that the provisions of section 19AB required the court to impose on the person a federal sentence which was different from the sentence that was imposed by the primary judge, then that issue would be engaged. It does seem to have been engaged in the Court of Appeal because Justice Jerrard deals with it at 141. It lies behind a number of the comments of the other judges of appeal.

MR GOTTERSON:   I take it your Honour means by that that 19AB would, if applicable, require not a revisiting of the period of imprisonment overall, or the monetary penalties ‑ ‑ ‑

KIRBY J: In the light of the concession that you have drawn our attention to, unless Mr Burbidge can knock that out, then that may well be an answer to that point, but there remains lurking in the background, as Justice Hayne has pointed out, section 19AB, which does not appear to have been complied with because it requires them to fix a non‑parole period in respect of the sentence.

MR GOTTERSON:   With respect, your Honour, the 19AB is engaged where paragraph (a), paragraph (b) and paragraph (c) are cumulatively required.  Paragraph (b) is that, “a court imposes on the person a federal life sentence, or a federal sentence that exceeds ‑ ‑ ‑

KIRBY J:   It is not the life sentence, but it is a federal sentence.

MR GOTTERSON:   With respect, no, your Honour.

KIRBY J:   Is that a defined term?

MR GOTTERSON:   Yes, and I just took your Honours to the definition of “sentence” in section ‑ ‑ ‑

KIRBY J:   We have so many pieces of paper here with the statutes all over the place.  You will just have to remind me of what the definition is.

MR GOTTERSON:   I am sorry, your Honour.  Yes, and it may not be in the tabs, but it is set out or it is referred to in our paragraph 22 on page 194 of the application book and about the fifth line, the definition of “sentence” set out in section 16 of the Crimes Act, which is the applicable definition ‑ ‑ ‑

KIRBY J:   Yes, but if that is the definition and I do not know for the life of me, with all this paper, why we do not have the actual definition in the statute - it is probably somewhere here hidden in the papers - why is not the sentence that is imposed in default a sentence, a federal sentence and a sentence of imprisonment?  Imprisonment in default, that is the usual way in which it is expressed by courts, “and I sentence you in default to such and such a time of imprisonment”.

MR GOTTERSON:   Our submission is that it does not answer that description and that it is ‑ ‑ ‑

KIRBY J:   You say that, but that is mere assertion.  I am asking you why it does not.  That appears to be the express will of the Federal Parliament in respect of sentences and it would meet a concern that at least I have of picking up surrogate State laws and it would say we pick up those laws with all their differences, if there be any, but we require that the actual judge imposing the sentence, including a sentence of imprisonment in default, must fix a non‑parole period which will be a specification to federal crimes of the time after which ordinarily the person will have parole.

MR GOTTERSON:   The only submission I can make, your Honour, is that in terms of the operation of the 19AB on the conviction here the penalty that was imposed was the monetary penalties.  There was not a sentence of imprisonment imposed.  There were default ‑ ‑ ‑

KIRBY J:   To the person on whom it is imposed it would feel awfully like a sentence of imprisonment.  They are in prison.

MR GOTTERSON:   I can offer no further submissions on the point.

KIRBY J:   Yes, thank you, Mr Gotterson.  Mr Burbidge, you have been a bit naughty here.  First of all you handed up a paper, you get a period of time in this Court and you were given an extension of time out of our great mercy and then you handed up at the end a document which we do not have time within your time to read.  So as far as I am concerned, I am not going to read it.

MR BURBIDGE:   If the Court pleases.

KIRBY J:   Coming now to the point that seems to be a point of concern, it is not something that you raise in your notice of appeal.

MR BURBIDGE:   I see that, your Honour.  I should say defensively ‑ ‑ ‑

HAYNE J:   Or in your summary of argument, Mr Burbidge, anywhere.

MR BURBIDGE:   Your Honour, I do not know that, with respect, our applicants’ reply, page 198, does touch on the matter insofar as we submit that the Crimes Act provision and those of the Penalties and Sentences Act require guidance of the Court simply because of the reason that appears in our latest document, which your Honours are not going to look at, which indicates that these people have fallen between two stools.  They are not getting the benefit of the Corrective Services Act (Qld) on one view, nor

have they been sentenced in connection with the federal aspect of the matter in accordance with Part 1B.

CRENNAN J: Do you agree with Justice Williams that an application under section 19AB might be made at a subsequent time?

MR BURBIDGE:   With respect, we wonder, having had penalties imposed, having applied for time to pay and having been refused and it being recognised that the respondent has in fact issued warrants for our arrest, we wonder at what point in time his Honour had in mind?  After we are in gaol, perhaps?

KIRBY J:   But as you would know, sometimes parole questions are dealt with whilst the person is in prison.  In fact, that is quite common in New South Wales.

MR BURBIDGE:   It is, your Honour, yes, but our point simply at the moment is that, as the Court of Appeal judgments stand, we have a divided court as to whether or not we come under the Penalties and Sentences Act so far as parole is concerned or whether we come under the Commonwealth Act.

KIRBY J:   Yes.  Anything else?

MR BURBIDGE:   No, your Honour.

KIRBY J:   We will adjourn briefly to consider what we will do in this matter.

AT 11.18 AM SHORT ADJOURNMENT

UPON RESUMING AT 11.23 AM:

KIRBY J:   The applicants seek special leave to appeal to this Court both against the convictions entered against them in the Supreme Court of Queensland as varied by the Court of Appeal of that State and against the sentences thereafter imposed on them for offences against the Excise Act 1901 (Cth).

So far as the convictions are concerned, the applicants seek to argue that section 255 of the Customs Act 1901 (Cth) and section 144 of the Excise Act 1901 (Cth) are not valid laws of the Commonwealth and that their convictions were unjust. The essential point concerning constitutional invalidity is one about whether the provisions of federal law for proof of issues by reliance on averments is valid or is inconsistent with the constitutional functions reserved to the judicature in the exercise of federal jurisdiction. Such issues were adverted to in Chief Executive Officer of Customs v El Hajje (2005) 224 CLR 159 and in other cases.

These issues may warrant attention by this Court at some future time.  However, having regard to the powerful factual findings made by the trial judge, which the applicants do not challenge, we are not convinced that the propounded constitutional questions would arise for determination.  Nor are we convinced, in the circumstances of this case, that the challenges to the remaining convictions would enjoy reasonable prospects of success, whether on the basis of miscarriage of justice or otherwise.  The applicants’ applications with respect to the convictions are therefore refused.

So far as the challenges to the sentences imposed on the applicants for their convictions are concerned, we do not consider that there would be reasonable prospects of success in that challenge to the holding below that the State law on default sentences, namely, the Penalties and Sentences Act 1992 (Qld), section 182A, was picked up and applied in federal jurisdiction to the federal offences in question here.

The argument that upon the disturbance of the convictions of the second and third applicants by the Court of Appeal of Queensland that court ought to have reconsidered the sentences of imprisonment on those applicants has more merit.  However, we are not convinced that any injustice has been shown requiring or warranting the intervention of this Court on the question of sentencing.

We note that, before the Court of Appeal, the applicants did not challenge the view that if the ordered penalties were unpaid, resulting in default periods totalling up to five years, these were appropriate having regard to their overall criminality.

So far as section 19AB of the Crimes Act 1914 (Cth) is concerned, the applicants state no ground of appeal founded on that provision. We express no view on the point, which is a point that divided the Court of Appeal. In particular, we express no view on whether an application may now be made in reliance upon that section.

The applications for special leave to appeal against the sentences are therefore also refused.  The result is that the applications are refused. 

MR BURBIDGE:  If the Court pleases.

KIRBY J:   This is not a matter where costs would be ordered, I assume.  Have you sought costs?

MR GOTTERSON:   I think we did, if the Court pleases.

KIRBY J:   Do you seek them now?

MR GOTTERSON:   Yes, if the Court pleases.

KIRBY J:   What is your attitude, Mr Burbidge?

MR BURBIDGE:  I do not wish to be heard on the subject, your Honour.

KIRBY J:   Is this not a proceeding criminal in nature?

MR BURBIDGE:  Indeed, your Honour.  Yes, I suppose as a matter of principle I should ask that no order be made as to costs for that reason.

HAYNE J:   They are civil penalty provisions, are they not, Mr Burbidge?  The whole burden of Labrador (No 1), of course, was that there is no bright line between the two.

MR BURBIDGE:   Indeed, your Honour.  On that basis, your Honour, I will seek that your Honours make no orders as to costs.

KIRBY J:   Where do you seek your costs, Mr Gotterson?  I am sorry to extend this already lengthy proceeding.  On page 172 at paragraph 33 the applicant says:

Costs should follow the event if the application is dismissed.

MR GOTTERSON:   On page 194, I think, of the appeal book, if your Honour pleases.

KIRBY J:   I am not hearing you.

MR GOTTERSON:   I am sorry, your Honour, yes.  Page 194 of the appeal book, paragraph 23, and likewise with regard to the conviction appeal there is a similar paragraph.

KIRBY J:   The Court will make no order as to costs.

MR GOTTERSON:   If the Court pleases.

MR BURBIDGE:  If the Court pleases.

KIRBY J:   The Court will now adjourn for the succeeding matters and the establishment of the video link to Adelaide.

AT 11.30 AM THE MATTER WAS CONCLUDED