Michael Leslie Goulding, Delegate of the Chief Executive Officer of Customs v Waylen Enterprises Pty Ltd t/as Harland Tyres (in Liq)

[2000] WASC 119

MICHAEL LESLIE GOULDING, DELEGATE OF THE CHIEF EXECUTIVE OFFICER OF CUSTOMS -v- WAYLEN ENTERPRISES PTY LTD t/as HARLAND TYRES (IN LIQ) & ORS [2000] WASC 119

Jurisdiction:	SUPREME COURT OF WESTERN AUSTRALIA	Citation No:	[2000] WASC 119
Case No:	CIV:2041/1996	Heard:	5 MAY 2000
Coram:	MASTER SANDERSON	Delivered:	15/05/00
No of pages:	8	Judgment Part:	1 of 1
Result:	Leave granted
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Parties:	MICHAEL LESLIE GOULDING, DELEGATE OF THE CHIEF EXECUTIVE OFFICER OF CUSTOMS WAYLEN ENTERPRISES PTY LTD t/as HARLAND TYRES (IN LIQ) KIM LOUISE ALDWORTH EILEEN MARY MONK LARAN HOLDINGS PTY LTD t/as F & M TYRES PETER JOHN MONK EILEEN MONK TURRUMGA PTY LTD
Catchwords:	Practice and procedure Application to amend statement of claim Turns on its own facts
Legislation:	Customs Act, s 4
Case References:	Goulding, Delegate of Chief Executive Officer of Customs v Waylen Enterprises Pty Ltd t/as Harland Tyres (In Liq) & Ors [1999] WASC 238 Henty v Bainbridge-Hawker (1963) 36 ALJR 354 Kelly v Wong, unreported; SCt of NSW; Library No BC9803113 Marlow v Herd [1990] 2 Qd R 519 Stephens v Reid [1902] 28 VLR 82 Dennis Wilcox Pty Ltd v FCT (1988) 79 ALR 267 Lee v Lee's Air Farming Ltd [1960] 3 All ER 420 Nationwide News Pty Ltd v Wiese (1990) 4 WAR 263 Pioneer Concrete Services Ltd v Yelnah Pty Ltd (1986) 11 ACLR 108 Re Salomon [1897] AC 22 Smith, Stone & Knight Ltd v Birmingham Corporation [1939] 4 All ER 116 State Bank of Victoria v Parry (1989) 2 ACSR 15 Tate v Freecorns Pty Ltd [1972] WAR 204

JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA

IN CHAMBERS

CITATION : MICHAEL LESLIE GOULDING, DELEGATE OF THE CHIEF EXECUTIVE OFFICER OF CUSTOMS -v- WAYLEN ENTERPRISES PTY LTD t/as HARLAND TYRES (IN LIQ) & ORS [2000] WASC 119 CORAM : MASTER SANDERSON HEARD : 5 MAY 2000 DELIVERED : 15 MAY 2000 FILE NO/S : CIV 2041 of 1996 BETWEEN : MICHAEL LESLIE GOULDING, DELEGATE OF THE CHIEF EXECUTIVE OFFICER OF CUSTOMS

Plaintiff

AND

WAYLEN ENTERPRISES PTY LTD t/as HARLAND TYRES (IN LIQ)
First Defendant

KIM LOUISE ALDWORTH
Second Defendant

EILEEN MARY MONK
Third Defendant

FILE NO/S : CIV 2042 of 1996 BETWEEN : MICHAEL LESLIE GOULDING, DELEGATE OF THE CHIEF EXECUTIVE OFFICER OF CUSTOMS

Plaintiff

AND

(Page 2)

LARAN HOLDINGS PTY LTD t/as F & M TYRES
First Defendant

PETER JOHN MONK
Second Defendant

EILEEN MONK
Third Defendant

TURRUMGA PTY LTD

Fourth Defendant

Catchwords:

Practice and procedure - Application to amend statement of claim - Turns on its own facts

Legislation:

Customs Act, s 4

Result:

Leave granted

(Page 3)

Representation:

CIV 2041 of 1996

Counsel:

Plaintiff : Mr P G McGowan
First Defendant : No appearance
Second Defendant : Ms J E Bartlett
Third Defendant : Ms J E Bartlett

Solicitors:

Plaintiff : Australian Government Solicitor
First Defendant : No appearance
Second Defendant : Jackson McDonald
Third Defendant : Jackson McDonald

CIV 2042 of 1996

Counsel:

Plaintiff : Mr P G McGowan
First Defendant : Ms J E Bartlett
Second Defendant : Ms J E Bartlett
Third Defendant : Ms J E Bartlett
Fourth Defendant : Ms J E Bartlett

Solicitors:

Plaintiff : Australian Government Solicitor
First Defendant : Jackson McDonald
Second Defendant : Jackson McDonald
Third Defendant : Jackson McDonald
Fourth Defendant : Jackson McDonald

(Page 4)

Case(s) referred to in judgment(s):

Goulding, Delegate of Chief Executive Officer of Customs v Waylen Enterprises Pty Ltd t/as Harland Tyres (In Liq) & Ors [1999] WASC 238
Henty v Bainbridge-Hawker (1963) 36 ALJR 354
Kelly v Wong, unreported; SCt of NSW; Library No BC9803113
Marlow v Herd [1990] 2 Qd R 519
Stephens v Reid [1902] 28 VLR 82

Case(s) also cited:

Dennis Wilcox Pty Ltd v FCT (1988) 79 ALR 267
Lee v Lee's Air Farming Ltd [1960] 3 All ER 420
Nationwide News Pty Ltd v Wiese (1990) 4 WAR 263
Pioneer Concrete Services Ltd v Yelnah Pty Ltd (1986) 11 ACLR 108
Re Salomon [1897] AC 22
Smith, Stone & Knight Ltd v Birmingham Corporation [1939] 4 All ER 116
State Bank of Victoria v Parry (1989) 2 ACSR 15
Tate v Freecorns Pty Ltd [1972] WAR 204

(Page 5)

1 MASTER SANDERSON: This is the plaintiff's application for leave to amend his statement of claim in terms of the minute of proposed amended statement of claim lodged on 7 March 2000. There are two separate actions but the application on each is essentially the same. This version of the statement of claim was lodged after leave to amend in terms of an earlier minute was refused: see Goulding, Delegate of Chief Executive Officer of Customs v Waylen Enterprises Pty Ltd t/as Harland Tyres (In Liq) & Ors [1999] WASC 238. It is central to the plaintiff's cause of action against the defendants that the plaintiff establish that the second and third defendants are the "owners" of certain goods which the plaintiff alleges were smuggled. For the purposes of this application, any detailed recitation of the facts is unnecessary. The short point at issue in the present application is whether the plaintiff's statement of claim in its proposed form pleads facts which could give rise to a finding that the second and third defendants were the owners of the goods.

2 The present version of the statement of claim differs from earlier versions in a number of important respects. In par 2(i) it is now pleaded that the first defendant is a trading company, rather than simply a corporation. Paragraph 4(i) reads as follows (the words added in the latest version of the statement of claim are underlined):

"4. (i) At all times from July 1991 to December 1992 the First Defendant carried on the sole business of a retailer of remoulded truck tyres ('goods') under the business name 'Harland Tyres W.A.'. The profits of the business were distributed or alternatively distributable to the Second Defendant."

Paragraph 4(iii) pleads as a material fact ownership of the goods by the first and third defendants. Sub-paragraph (c) of the particulars refers to par 4(i) above and to par 12(i), (iii), (iv), (v) and (vi). Reference to the sub-paragraphs of par 12 are references to the knowledge of the third defendant about the activities of the first defendant. These sub-paragraphs read as follows:

"12. Further, the Third Defendant, in her capacity as shareholder and director, by act or omission was directly or indirectly concerned in the contraventions of the Act as pleaded herein and pursuant to s 236 of the Act is deemed to have contravened the said sections of the Act.

(Page 6)

Particulars of Concern

(i) the Third Defendant, in her capacity as shareholder and director of Laran and the First Defendant facilitated the carrying on of the business by members of Peter John Monk's family and the perpetration of the contraventions of the Act through these entries;

...

(iii) the Third Defendant operated an account in England at National Westminster Bank at 522, London Road, Westcliff-on-Sea, through which an amount of £30,000 in payment of tyres shipped to Laran was channelled on 17 May 1993 to avoid detection of the larger amounts remitted abroad, full particulars of which are within the Defendants' knowledge and brief particulars of which are set out in Schedule B attached hereto;

(iv) on occasions, Carol Keyser and Rae Bassell received oral directions or instructions from the Third Defendant to enter amounts remitted abroad, disguised as payments to third parties, in Laran's cash books as payments for tyres imported by Laran, full particulars of which are within the Defendants' knowledge and brief particulars of which are as set out in Schedule B;

(v) on occasions, Carole Keyser and Rae Bassell received oral directions and instructions from the Third Defendant to keep the invoices for imported tyres/goods separately from other invoices to avoid detection of the contraventions of the Act;

(vi) in respect of some remittances abroad in payment of tyres imported by Laran, the Third Defendant personally authorised Laran's bank to remit the funds overseas, full particulars of which are within the Defendants' knowledge and brief particulars of which are as follows;

(Page 7)

Particulars

AmountsDates
(a) £17,771 22/04/91
(b) £13,518 24/05/91
(c) £17,778 17/06/91
(d) £18,278 24/12/91
(e) £19,744 18/10/91
(f) £17,249 20/11/91
(g) £19,097 05/03/91

Except for (f) above which was in writing, the authorisations were made orally and evidenced by ANZ Bank's Requisition for Overseas Telegraphic Transfers dated as above.
... "

3 Counsel for the third defendant submitted that the pleading still did not contain material facts which would render the third defendant the owner of goods within the definition of that term contained in s 4 of the Customs Act. Counsel for the plaintiff answered that submission in two ways. Firstly, it was submitted that the construction of the words "beneficially interested" in s 4 of the Act, in the particular circumstances of this case, meant the third defendant fell within the definition of "owner" contained in the Act. Secondly, it was submitted that in actions brought under the Customs Act the corporate veil could be lifted and it was open to the court that the third defendant was, in fact, an owner of the goods.

4 Turning, first, to the question of construction, there are a number of facts which are important. It is now alleged that the first defendant was a trading company whose sole business was the purchase and sale of tyres ("the goods"). The third defendant is a shareholder in the first defendant and therefore has a proprietary interest in the company. The business being conducted by the first defendant was a family business carried on by the Monk family and the third defendant would participate in any profits earned by the business. It might well be said then, as was argued by counsel for the plaintiff, that the third defendant was the owner of the goods in the sense that she had a beneficial interest in any income flowing to the company as a consequence of a transaction involving the goods. Although this is to adopt a wide interpretation of the expression "owner" it

(Page 8)

is consistent with the breadth of definition in s 4 of the Act and with the ambit which has been given to the term when it has been considered by the courts: see Henty v Bainbridge-Hawker (1963) 36 ALJR 354 per Owen J at 356; Marlow v Herd [1990] 2 Qd R 519.

5 There is also some support in the cases for lifting the corporate veil in cases of a Customs Act prosecution. In Kelly v Wong, unreported; SCt of NSW; Library No BC9803113, the court said:

"Clearly, however, the legislature formulated the definition of 'owner' in such wide terms in order to protect the revenue from those who would attempt to defraud it by non-payment of duty ... . When one is dealing with a criminal enterprise, it is appropriate that the definition of owner be given its fullest effect ... the court is entitled to take a common sense view of criminal activities."

6 This approach is supported by the Victorian decision of Stephens v Reid [1902] 28 VLR 82. It must be said that there is nothing in the legislation which would support this approach and given that this is a civil action, the principles of company law cannot be ignored entirely. But that is not to the point. The question is whether or not the pleading should be allowed. Given the approach adopted by the courts, it is at least arguable that the claim made by the plaintiff is open and I ought therefore let the pleading stand.

7 In all the circumstances, I am satisfied that the pleading is in a proper form and that it ought stand as the plaintiff's statement of claim. I will make the necessary orders to that effect and I will hear counsel with respect to costs.